Professional Documents
Culture Documents
Max Cesar, Alberto Chaia, Andre de Oliveira Vaz, Gonzalo Garcia-Muñoz, and Philipp Haugwitz
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For decades, Mexican citizens who wanted to Still in the early stages of its digitization journey,
get a copy of their birth certificates underwent a Mexico ranks 55th in McKinsey’s analysis of the
long, tedious, and uncertain process. They needed digital maturity of 151 countries.2 When compared
to retrieve their parents’ birth certificates, get a with countries with similar per capita GDPs, this is a
document signed by a representative of the Mexican laudable standing. But Mexico has yet to achieve the
Ministry of Health, and visit a local office of the kind of world-class digital transformation that fuels
Civil Registry. When the certificate finally arrived, productivity and economic growth; as of right now,
anywhere between two weeks and two months later, the country is about halfway there. To move forward,
there were sometimes errors in the name, date of birth, the Mexican government’s ambitions should be more
and even gender. closely aligned with those of higher-performing
countries like Estonia and Malaysia—nations with
Today, however, Mexicans can get a secure, certified, income levels close to that of Mexico but that “punch
and error-free copy of their birth certificate above their weight” in regard to digital maturity
within minutes by logging onto gob.mx, a one-stop (Exhibit 1).
portal that consolidates 34,000 databases from
250 government institutions and 5,400 public We estimate that were Mexico to attain a “good” or
services.1 The site, launched in 2014, is the “very good” digital-maturity rating, it would boost
centerpiece of Mexico’s drive to digitize the the country’s GDP by 7 to 15 percent (or $115 billion
operations of its federal government—part of a to $240 billion) by 2025. The growth would come
wave of such efforts to improve government from greater productivity and employment in existing
productivity taking place across the globe. sectors, the creation of new digital (or digitally
powered) businesses, the expansion of the information-
and-communication-technology (ICT) sector, and
Mexico’s digital underspending a successful labor-force transition to these new
digital industries (Exhibit 2).3 As the second-largest
In addition to underspending on information economy in Latin America, Mexico also has a unique
and communication technology (ICT), Mexico is opportunity to set the standards for what a digitally
spending less on its digital-government unit as enabled government looks like in the region.
compared with digital leaders around the globe.
This unit gets 0.003 percent of the total budget, Implementing these kind of changes is no small
while Canada’s digital unit, for example, receives task (see sidebar, “Mexico’s digital underspending”).
around 0.012 percent (about 15 times more in First, Mexico needs to invest significant additional
terms of total expenditure) and Estonia’s gets resources in ICTs, since its government spending
0.105 percent (about one-and-a-half times more lags behind in relation to the weighted average for our
in absolute terms, despite having an economy that benchmark countries: 1.5 percent of the federal budget
is 45 times smaller).¹ However, the responsibility goes toward ICT versus the 3.9 percent weighted
for investment does not rest solely with the average.4 To get up to speed, we estimate that public
government. Mexico’s ICT private sector spends and private spending on ICT in Mexico would need to
2.0 percent of GDP, versus the 4.7 percent that is increase by at least 5 percent.
the average for our benchmark countries.
How Mexico stacks up
1
Digital Government in Chile: Strengthening the Institutional
In this article, we look at how Mexico is faring along
and Governance Framework, Paris, France: OECD
Publishing, 2016. the four critical dimensions used to define digital
2
McKinsey on Government November 2018
Mexico
Exhibit 1 of 3
Exhibit 1 Mexico shows a good performance when compared with other countries with
similar GDPs.
80
Very good
Estonia
Good
Malaysia
60
Acceptable
Digital Mexico
Maturity
40
Index,¹
0–100
20 Poor
0
0–10,000 10,000–20,000 20,000–30,000
GDP per capita,2 purchasing-power parity, $, 2016
1
Cuts between the different levels of the Digital Maturity Index were determined according to the distribution of the results of all “high income” and
“upper middle income” countries (eg, Colombia), according to the World Bank classification. The cut of “very good” corresponds to scores between 1
and 2 standard deviations above the simple average (91>x>74), “good” to scores between the simple average and 1 standard deviation above the simple
average (74>x>57), “acceptable” to scores between the simple average and 1 standard deviation below the simple average (57>x>40), and “poor” to
scores of 1 standard deviation below the simple average (x<40). The index excluded 2 subdimensions of the framework (informed citizens and use of
advanced analytics in government) due to a lack of data to measure them.
2
GDP per capita is a proxy for total information-and-communication-technology expenditure per capita.
Source: World Bank International Comparison Program Database; McKinsey analysis
3
McKinsey on Government November 2018
Mexico
Exhibit 2 of 3
Exhibit 2 Getting to a higher level of digitization could boost Mexico’s GDP by up to 15 percent.
95 83 240
1,721 115
1,606 31
309
1,297
1
Considers the potential of traditional information and communications technologies, automation technologies, and other emerging technologies.
2
According to IHS Global Insight forecasts.
Source: IHS Global Insight; INEGI; McKinsey Global Institute analysis
infrastructure. But in 2016, Mexico had just rate of subscription to mobile broadband is higher, at
13 fixed-line broadband subscriptions for every 61 percent,6 but this still leaves a sizable portion of the
100 inhabitants, ranking it last among both population unconnected and thus spending additional
Latin American and Organisation for Economic time and money getting to physical centers to access
Co-operation and Development (OECD) peers.5 The government services. Because of this, Mexico ranks
4
McKinsey on Government November 2018
Mexico
Exhibit 3 of 3
Exhibit 3 Our comparison in each of the four critical dimensions shows a below-median
performance in Mexico in digital foundations and digital economy.
Dimensions
Foundations Digital government Digital economy Digital society
100
Best
performer
80
60
Mexico
40 Median
20
0 Worst
performer
93rd (again, last among all OECD countries) in our The country, however, receives low scores from
digital-foundations dimension. its citizens on their overall satisfaction with the
convenience and accessibility of government services.
Digital government In a recent survey, Mexico had the worst-rated citizen
Mexico has made notable progress in its efforts to experience (4.4 out of 10) of the group of countries
offer web and mobile access to public services (for surveyed (Canada, France, Germany, Mexico, the
those with such access) and to make government more United Kingdom, and the United States) and the largest
efficient by automating internal processes. In addition perception gap between what people experience in the
to the gob.mx portal, the country has created the role private sector versus the public sector.7
of national digital strategy coordinator within the
president’s office and has established a national digital In our digital-government subanalysis, Mexico
strategy. This has resulted in successful initiatives to comes in at 39th (out of 151 countries), similar to Chile,
make government data available to anyone and has Ireland, and Israel.
made Mexico the leading Latin American country on
the Open Data Barometer world ranking.
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Digital economy priorities. For governments, this means intimately
Mexico’s shaky digital foundations hurt its ability linking digital to public-policy objectives and
to have mature digital ICT industries. In addition viewing it as a lever for achieving them. In India,
to diminished access to high-speed internet, the for example, the government framed its goal of trans-
reliability of postal services is low, and fewer than forming the country into a digitally empowered
40 percent of Mexicans over the age of 15 have a bank society and knowledge economy in this way: “digital
account.8 As a result, the country is estimated to have infrastructure as a utility to every citizen.” The UK
poor potential for developing a robust e-commerce government talks about developing a world-leading
sector, which requires efficient delivery of products digital economy that works for everyone. To establish
and digital forms of payment.9 Moreover, less than a clear link between its digital vision and public
1 percent of Mexico’s exported goods and services value, Mexico’s incoming administration may want
relate to ICT. McKinsey’s digital-economy subindex to consider revisiting the country’s 2013 National
places Mexico in 92nd place. Digital Strategy and aligning it with Mexico’s
current and future needs, as well as with the new
Digital society government’s priorities.
Digitization can improve the quality of life for citizens
by fostering greater civic participation, providing This digital vision should be accompanied by a
access to information, and offering new tools for clear set of milestones and metrics that monitor its
health and education. In recent years, Mexico has implementation and impact closely. To ensure success,
accelerated its digital-society efforts and ranks initiatives that don’t yield the expected results should
34th on McKinsey’s index. On gob.mx/participa, be rigorously evaluated and adjusted or deprioritized in
for instance, citizens participate in public polls and relation to resources. Such a “test and learn” practice is
discuss government policies on forums and blogs. At not native to the public sector and will require the use of
datos.gob.mx/retos, which provides access to Retos different budgeting practices, such as top-down budgets
Públicos (retos is Spanish for challenges), software that allow a certain amount of flexibility.
entrepreneurs can present solutions to complex
public-policy problems, such as the creation of Setting up the correct delivery mechanism
earthquake alerts through push notifications on Digital transformations require ways of working that
mobile phones. are very different from how governments normally
operate. Instead of remaking products, processes,
Unlocking the opportunity and policies according to what benefits each agency,
To attain the meaningful economic and societal governments running successful transformations
benefits that come from having a digital government, typically orient their efforts around what citizens
there are three basic initiatives Mexican govern- desire and expect. This requires unprecedented,
ment leaders could consider putting on top of their and at times uncomfortable, levels of coordination
priority lists. among previously siloed entities, such as different
government agencies, levels of government, and
Defining a digital vision and strategy, then linking private-sector stakeholders.
them to policy priorities
Any successful digital transformation—whether To accelerate and streamline this transformation,
in the private or public sector—depends on having a Mexico could double down on its efforts to centralize
clear vision and defined goals, and then setting digital initiatives across government agencies by
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providing shared platforms and services so that the Smart Nation and Digital Government Group
individual units do not need to “reinvent the wheel” under the Prime Minister’s Office.11 The unit usually
and can focus on actual service delivery. Initially, has a strong sponsor. As in Singapore, it may report
this could involve coordination through a high-level to the president or prime minister, or the president
council that meets regularly. Such a council would or prime minister serves as the chair of periodic
oversee digital transformation across the government, progress-review meetings.
including deciding a rollout schedule of initiatives and
monitoring their progress with a publicly scrutinized Building digital foundations
set of periodic key performance indicators. It would Because the gaps in Mexico’s digital foundations have
also identify obstacles and give support to the different ramifications for each of the three other dimensions,
government agencies that can address them. If issues we suggest that addressing five essential building
cannot be resolved at this level, the council should have blocks could shore up the country’s infrastructure.
the capacity to escalate them.
Boosting digital accessibility
Ideally, this central group would have a direct role To increase internet access across Mexico, both
in designing interoperability and data-architecture national and state-level governments could provide
standards and would perform ongoing reviews of private companies with specific incentives for
the digital solutions being implemented by different investing in broadband networks in marginalized
government agencies. It would also ensure there communities, such as Chiapas and Oaxaca.12 In India,
is a consistent user experience (front end) and for example, the central government helped develop
compatibility with the data and systems of other the National Optical Fibre Network (BharatNet)
agencies (back end). Likewise, the group could play a through tax incentives to private providers that make
limited role in implementing pilots or new strategic investments in infrastructure. This effort successfully
initiatives, either through its own “digital factory”10 or brought broadband services to approximately
by managing external vendors. 115,000 villages, aiming to deliver broadband
connectivity to 250,000 villages overall.13
Eventually, and in a more advanced scenario, the
government could form a separate digital delivery Nurturing the right kind of talent
unit. The government of Singapore, for example, By 2030, automation technologies are expected to
established the Government Technology Agency displace nine million workers in Mexico,14 with the
(GovTech) as an implementing agency for the Smart eventual replacement jobs requiring entirely different
Nation and Digital Government Office, both part of skills and competencies—most of which the current
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Mexican educational system is not fully prepared to and establishes rules for connectivity via application
address. In recent years, Mexico has made significant programming interfaces. It also includes a regulatory
strides to boost the number of college graduates with “sandbox” in which companies without a banking license
degrees in science, technology, engineering, and can test solutions with real customers.
mathematics (STEM). In 2016, 25 percent of graduates
were from STEM disciplines, which is equal to the Since regulation can be daunting for start-ups,
OECD average. But overall, Mexico’s education system structures that help explain rules, offer advice, provide
still lags behind. According to a World Economic forums for getting questions answered, and generally
Forum survey, the quality of Mexico’s mathematics and remove uncertainty for start-ups can go a long way
science education ranks 126th out of 139 countries.15 toward fostering their creation. Singapore’s FinTech
And only 17 percent of Mexicans graduate from college Office could be one such model. The government’s
(as compared with the OECD average of 37 percent), monetary authority and its National Research
making the overall talent pool small.16 Foundation established a one-stop platform for
financial start-ups, providing guidance, significantly
To address this, CONACYT (Mexico’s National reducing bureaucratic complexity, and, in effect,
Council on Science and Technology) could fund promoting Singapore as a fintech hub.
a program dedicated to keeping primary and
secondary school teachers up to date in STEM Developing interoperability
knowledge and providing them with new teaching The traditional, siloed model of every agency
methodologies. Government incentives that procuring and maintaining its own technology
encourage students in rural areas to attend college is fading away. In its place are shared platforms
could also be extremely helpful. and services that enable the seamless sharing and
aggregation of data across agencies. With agencies
For existing workers, the Mexican government could powered by an integrated, cloud-based data
consider spurring the development of reskilling architecture, citizens can go online to track the
programs that will prepare people who are going progress of complex, multiagency requests, use the
to be, or who already have been, displaced by the same document to navigate multiple online processes,
increasingly automated and service-oriented and get their identities verified in one simple step. This
workplaces of the future. For example, through the model also reduces paperwork, streamlines back-
SkillsFuture program, the government of Singapore end processes, improves the government’s ability to
collaborates with private companies to develop provide targeted support programs, and allows real-
low-cost, massive, open, blended (in person and time updates of databases. It also affords the kind of
online) course programs to train new entrants to the 360-degree view of citizens that enables governments
workforce and reskill existing ones in new-economy to serve people more efficiently and effectively, a result
skills, like data analytics and innovation. much like what private-sector companies are trying
to achieve.
Creating smart regulation
The development of new business models often creates Although Mexico has taken steps toward this kind
a need for new or updated regulation. Mexico recently of system compatibility, a systematic approach to
passed, and is in the process of implementing, a fintech enforcing standards is lacking. All federal agencies,
law (Ley para Regular las Instituciones de Tecnología for instance, are required to report standardized
Financiera) that governs cryptocurrency transactions transparency data; yet the latest compliance report
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of the National Institute of Transparency, Access to Mexico has made substantial progress in digitizing its
Information and Personal Data Protection focused government in recent years. Yet before it can advance
on whether agencies filed their data on time, not on further and capture the significant economic potential
the quality of that data.17 There is an effort to design of digital, the country may want to take a step back
norms for systems and data architecture as well as and fix some of its foundations, most notably internet
for shared back-office services, but at the time this access, which reflects the inequalities present in
article was published, the website for the government’s Mexican society. Mexico’s incoming administration
interoperability initiative featured several technical could consider mapping out a clear path for how digital
documents that were incomplete or entirely empty. initiatives can help achieve its economic, educational,
Systematically enforcing technology standards and health-service, and national-security objectives.
imposing penalties for noncompliance can go a long
way toward ensuring a successful IT evolution. No doubt, there will be significant challenges. Going
digital will require an investment of financial
Addressing data privacy and cybersecurity resources, extensive coordination among the multiple
Without proper security measures in place, people stakeholders and levels of government, and new
and systems are vulnerable to cyberattacks.18 In regulations governing the growing e-commerce
April 2018, vulnerability in the software that connects and fintech sectors. It most likely would entail
Mexican financial institutions to the Interbanking participation incentives for the private sector, since
Electronic Payment System resulted in a theft of governments should not attempt to “go it alone.” In
around $15 million and significant delays in electronic the end, both sectors of society stand to reap the value
money transfers, including salary payments that were digitization will sow.
due during time of the attack.
1
Estrategia Digital Nacional: Ventanilla Única Nacional, gob.mx.
Mexico has established several cybersecurity units (one 2
To assess the digital maturity of 151 countries, we used
of them within the Mexican Central Bank as a response 26 publicly available indicators (such as those from the
International Telecommunication Union, United Nations, and
to the attack19) and defined the physical-, technical-, World Bank) to analyze four key dimensions of a government’s
and administrative-security measures government digital strategy: digital foundations, government, economy,
and society.
agencies managing personal data must take. But the
3
To measure the economic value of boosting digital adoption in
government might also consider playing aggressive a country, we estimated the potential impact that achieving an
defense so that it is ready for attacks. This can include average level of digitization (as measured by the penetration of
hiring actual hackers to test the system and find traditional information and communication technology) would
have on the productivity growth of aspirational countries. We
vulnerabilities that need to be closed, and simulating also estimated the potential productivity and employment impact
attacks so that response plans can be implemented in of the successful adoption of process-automation technologies,
the Internet of Things, and online platforms for better matching of
real time. Each government agency could also have talent supply with job demand.
a risk profile established so that capabilities can be 4
Forecast: Enterprise IT spending by vertical industry market,
developed accordingly. worldwide, 2015–2021, 2017 edition, Gartner, gartner.com;
World Economic Outlook, GDP data, International Monetary
Fund, April 2018, imf.org; World Bank public-spending data;
Digital Government in Chile: Strengthening the Institutional and
Governance Framework, Paris, France: OECD Publishing, 2016.
5
“Fixed-broadband subscriptions,” ITU, itu.int.
6
OECD Data Database, indicator: wireless mobile broadband
subscriptions, OECD, September 23, 2018, data.oecd.org.
9
7
McKinsey Public Sector Customer Experience Survey. In
early 2018, McKinsey surveyed more than 20,000 citizens Max Cesar is a consultant in McKinsey’s Mexico City
in six countries (Canada, France, Germany, Mexico, the office, where Alberto Chaia is a senior partner, Gonzalo
United Kingdom, and the United States) to find out about their Garcia-Muñoz is a partner, and Philipp Haugwitz is a
experience as users of public services.
consultant; Andre de Oliveira Vaz is a specialist in the
8
Global Findex Database 2017, World Bank Group, globalfindex
.worldbank.org. Costa Rica office.
9
UNCTAD B2C e-commerce index 2017, United Nations
Conference on Trade and Development, October 2017, unctad The authors wish to thank Nicolás Grosman and Beltrán
.org; World Development Indicators Database, World Bank Simó for their contributions to this article.
Group, September 2018, databank.worldbank.org; Postal
development report 2018: Benchmarking a critical infrastructure
for sustainable development, Universal Postal Union, April 2018, Copyright © 2018 McKinsey & Company.
upu.int. All rights reserved.
10
An in-house digital-development group with its own engineers,
designers, and other workers that develops and launches digital
solutions. An example is the US Digital Service, a White House
unit with more than 200 software engineers, user-experience
designers, and product managers who work with federal
agencies to launch digital-lighthouse projects. See Matthias
Daub, Axel Domeyer, Julia Klier, and Martin Lundqvist, “Digitizing
the state: Five tasks for national governments,” November 2017,
McKinsey.com.
11
GovTech Singapore, tech.gov.sg.
12
BIT Database, Instituto Federal de Telecomunicaciones,
September 2018, bit.ift.org.mx.
13
Bharat Broadband Network, bbnl.nic.in.
14
For the full McKinsey Global Institute report, see “Jobs lost, jobs
gained: What the future of work will mean for jobs, skills, and
wages,” November 2017, McKinsey.com.
15
The Global Information Technology Report 2016, World Economic
Forum, July 2016, weforum.org.
16
Mexico: Overview of the education system (EAG 2017) Database,
indicator: attained a tertiary education degree, 25-64 year-olds
(%), Organisation for Economic Co-operation and Development,
September 6, 2018, gpseducation.oecd.org.
17
“Acusan evaluación burocrática del INAI,” Nosotrxs, April 11,
2018, nosotrxs.org; InteroperaMX, gob.mx.
18
David Abusaid, Andrea Cristofori, Rafael Fernández MacGregor,
Sergio Waisser, Perspectiva de ciberseguridad en México,
McKinsey and COMEXI, June 2018, consejomexicano.org.
19
“Mexico central bank to create cyber security unit after hack,”
Reuters, May 15, 2018, reuters.com.
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